Monday, September 3, 2012

Putrajaya urged not to shell out for ‘loss of future profits’ in EDL takeover

Putrajaya urged not to shell out for ‘loss of future profits’ in EDL takeover

September 03, 2012

Malaysian Insider

KUALA LUMPUR, Sept 3 — Putrajaya should not have to pay more
than RM1.3 billion to highway toll operator Malaysian Resources
Corporation Berhad (MRCB) to take back the concession for the
controversial Eastern Dispersal Link (EDL), an opposition lawmaker said
today, and urged the federal government to disclose full details of the
agreement.

Petaling Jaya Utara MP Tony Pua (picture) said
he welcomed the government’s announcement last week that it would be
buying back the RM1 billion highway in Johor that could have seen road
users pay a six-fold toll hike for a roundtrip to Singapore.

But, he said, the government should now declassify the concession
agreement to prove that the compensation package would be fair and not
lopsided to benefit the concession holder as in past projects.
“There’s no reason why the government cannot do this as past
concession agreements have already been declassified by former Works
Minister Datuk Seri Mohd Zin Mohamed in 2009.

“We do not want the government to agree to buy back the concession
only to compensate for ‘loss of future profits’ to MRCB — which
effectively means taxpayers’ money will be used to pay for toll upfront
to MRCB,” he said in a statement.

He gave as an example of lopsided highway deals the aborted Gerbang
Perdana “crooked bridge” — also in Johor — which saw the federal
government using RM257 million from public funds to compensate the
contracted highway concessionaire.

“This was despite the fact that they would only be paid RM100 million to build the bridge,” he said.
Pua said based on the terms in past concession contracts, the
government was only required to pay for the “value of the construction
works” of the highway and “12 per cent interest returns per annum to
shareholders’ capital and loan invested”.

According to his calculations, the government only need pay MRCB a sum amounting to not more than RM1.3 billion.

“By paying MRCB anything more than RM1.3 billion, it will show that
BN is abusing its powers to profit its crony companies and is failing in
its fiduciary duty to protect and defend the interest of ordinary
Malaysian taxpayers,” he said.

Minister in the Prime Minister’s Department Tan Sri Nor Mohamed
Yakcop had announced on August 30 that the government would take over
the EDL after talks between both parties.

MRCB had proposed a RM9.10 toll in each direction for passenger
vehicles using its RM1 billion EDL highway from the Causeway to the
immigration post.

However, the Umno-linked company is using an open toll system that
charges the full fare at the new Customs, Immigration and Quarantine
(CIQ) checkpoint regardless of where motorists exit or enter the highway
— the latest facility for the ambitious Iskandar zone that celebrates
its fifth anniversary this weekend.

The rest of the 8.1km stretch leading to the Pandan interchange of the North-South Expressway will be free to motorists.

Local business leaders had expressed concerns that with the new CIQ
already taking Singapore tourists away from downturn Johor Baru, the EDL
will see them skip the more inland Tebrau area as well.
Taxi drivers also called for an exemption as it would otherwise be unfeasible to ferry passengers across the Causeway.

The EDL opened on April 1 without any toll collection after being delayed from a scheduled first-quarter launch.

In a visit to Johor in March, Prime Minister Datuk Seri Najib Razak had promised a solution to the controversy.

Over 50,000 vehicles cross the bridge daily, mostly Malaysians living
in and around the state capital who commute to the island republic to
work.

Johor Baru’s economy is also heavily reliant on Singaporeans who cross the Straits of Johor to enjoy cheaper prices there.

Putrajaya set up the Iskandar zone five years ago to turn Johor Baru
and its surrounding region into an economic growth area catering to the
spillover from Singapore.

Cars and lorries exiting Singapore and heading into Johor now pay
RM2.90 and RM5.50 respectively to use the bridge while motorcycles,
which make up more than half of traffic across the Causeway, are exempt
from the toll.

Singapore’s Straits Times reported in 2008 that rates will
be raised every three years of the 30-year concession and will peak at
RM14.60 for passenger vehicles and RM29.20 for lorries